Memecoins proliferate

Well, Bitcoin's rebound sure hit a wall. The $65K level, seen earlier this week, suddenly seems like an eon ago as BTC flirts with sub-$61K.

In a topsy-turvy trading-factor week, various tailwinds (looser money, a rush of big institutions) simply are not materializing. Plus, the entire crypto sector remains under intense regulatory scrutiny.

Memecoins? They just keep coming.

Just in the month of April, CoinMarketCap added 138 meme-related tokens (many running on Ethereum and Solana) to the ranks of digital assets on which the website keeps tabs; all told, CoinMarketCap counts 2,229 memecoins with a combined market capitalization of $50 billion. CoinDesk, citing X pundit Crypto Coryo, estimates that possibly as much as nine-tenths of all memecoins in existence haven't even yet found their way to the CoinMarketCap list.

In April of 2023, by way of contrast, the website tracked fewer than 20 memecoins.

Often ridiculed as ultra-foolhardy, these assets nevertheless can be a mermaid’s serenade for meme-sea-faring speculators as well as a kind of bonding agent for burgeoning communities of animal lovers, connoisseurs of ironic humor and, increasingly, political partisans.

"The meme coin season continues to march forward, undeterred by the stalled rally in BTC," CoinDesk said.

Pepe the Frog was an early form of animated shorthand used on the internet circa the ‘00s to convey a range of emotions, from smug satisfaction to sadness, but circa 2016 this visual inside joke was notoriously appropriated by some members of the white supremacy movement. More recently, Pepe the meme ceded some of its toxicity, and also its relevance, as Pepe the memecoin rocketed to prominence (entering from stage right).

With its market capitalization of nearly $3.4 billion, PEPE is now the 33rd-largest digital asset, per CoinGecko. PEPE has gained 13.5% in the past week.

Memecoins connected with Donald Trump are rallying following an event at his Mar-a-Lago resort in Palm Beach, Fla., in honor of holders of the Republican frontrunner's NFT collection. The convergence of candidate and crypto helped boost the $265 million-in-market-cap MAGA memecoin. MAGA gained 34% in the past 24 hours.

A smaller-sized coin, TREMP, shot up 113% in that same span, according to CoinGecko.

BODEN, a spoof of President Biden, also gained overnight. (It’s the No. 255 coin with a market cap of $244 million).

According to CoinDesk, BODEN soared by as much as 25% yesterday after Trump reportedly responded to a question about it, fanning publicity.

In a related story, Van Eck MarketVector launched a memecoin index to track the biggest-cap tokens in this camp. Constituents include Pepe, Dogecoin, Shiba Inu, Dogwifhat, and Bonk. On paper, on a yearly basis, the index is +195%.

Bitcoin, as of early Thursday, remained above $61,000 but only barely. The largest crypto lost about 2% in the past 24 hours. As of 8 a.m. (EST), BTC was $61,070.

Headwinds are stiff, plentiful: hawkish monetary policy; coin unlocks; and an ever-intensifying SEC crackdown on crypto.

The greenback is strong, bolstered by expectations that the Federal Reserve could keep interest rates higher for a prolonged period. “This is exerting pressure on BTC prices,” CryptoNews said.

Treasury yields were rising in pre-market trading this morning. Stock futures were falling.

Total crypto assets, as of 8:38 a.m. (EST), had declined 0.8% over the prior 24 hours to reach $2.39 trillion.

Bitcoin seems on the verge of a relatively placid period, per an indicator known as the volatility risk premium (VRP).

As CoinDesk explains, VRP gets calculated by way of options market data reflecting the spread between forward-looking implied volatility of the underlying asset (Bitcoin, in this case) versus its realized volatility over a trailing 30-day period.

Consider that in times of extreme uncertainty, the seller of an option can command a higher premium as compensation for the extra risks being anticipated.

As of Bitcoin's halving event, on April 20, Bitfinex analysts pegged BTC’s one-month VRP at 15%.

Since then, the VRP has narrowed to 2.5%.

"It indicates a realignment of market expectations to a more stable and predictable environment post-halving," Bitfinex analysts told CoinDesk. "The market consensus seems to be that future volatility may be less than previously anticipated."